Michigan Broker Dan receives a $6,000 earnest money deposit as a personal check from a buyer. The purchase agreement is accepted and signed by all parties. Dan knows from experience that personal checks sometimes bounce, so he waits 10 business days before depositing the check to confirm the buyer's funds are available. The check ultimately clears without issue. Under Michigan trust account rules, Dan's delay in depositing the check is:
Correct Answer
A) A violation because earnest money must be deposited into the trust account promptly upon receipt
Under MCL 339.2512 and Michigan Occupational Code requirements, a broker must deposit earnest money into the trust account promptly upon receipt — typically within a very short timeframe after acceptance of the purchase agreement. A 10-business-day delay is not considered prompt and constitutes a trust account violation. The fact that the check eventually cleared and no party was harmed does not cure the violation, as Michigan law does not provide a 'no harm' defense for untimely deposits.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
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